Choosing a Virtual Data Room for Due Diligence
When companies work with partners to develop products, manufacture building structures or offer services, they typically share contracts, documents and other data. Virtual data rooms allow businesses to securely share this information, without exposing themselves to potential breaches or infringing laws and regulations. They make it easy for all parties to find the data, read it, and then redact the information.
M&A due diligence is among the most common applications for VDRs however there are other scenarios as well. Private equity firms and funds utilize VDRs to share portfolio information such as tax information, fund documents with investors. Investment banks can also use them to aid the buy- and sell-side of a financial transaction by assisting with document preparation due diligence and review of contracts.
During due diligence, the reliability of the VDR is vital to the success of the transaction. Whether you are sharing a VDR to facilitate M&A, a capital raise or other deal, choose a provider that has proven reliability in performance and support. Ask your vendor for downtime and uptime data and compare them to other vendors.
In addition, consider the quality of the user experience. Look for vendors who offer simple tools for users to use, such as drag and drop to upload large amounts of files and at-a glance reporting. Be sure that the customer service representatives from the vendor are familiar with your business and can support processes similar to yours. This way, they can provide fast, efficient and thorough support throughout the process.
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